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2022 (9) TMI 924 - AT - Income TaxUnexplained Cash withdrawn out of bank account - Gap between withdrawal and deposit of the cash - withdrawn and deposit of cash with a gap of 70 days - HELD THAT - The withdrawn and deposit of cash with a gap of 70 days which was considered by the ld. AO as seven months. The ld. Counsel clearly stated that the sufficient cash was withdrawn in same bank account and after part utilization of the same; the amount was deposited in same HDFC Bank account. Appellate authority without considering the proper fact and submission of the assessee had passed the order ex parte. CIT(A) was failed to dispose the appeal on merits and has not contended the explanation of the assessee. As stated in the submission that the assessee was not able to present before the CIT(A) due to the fact that the appellant expired on 23.10.2020 thereafter her husband also expired on 03.11.2020. The copy of the death-certificate of the assessee and her husband are being enclosed - In these circumstances here the genuine cause for non-appearance before the CIT(A). We are in opinion that the assessee has sufficient cause during the depositing of cash in her bank account. The heafty amount was withdrawn 70 days ago for utilising the same for the business of her son. Unused amount was deposited in the same bank account of the assessee. The source of deposit of cash was well explained before the revenue authorities by the assessee. Therefore, AO was indeed in error in adopting a wrong fact in his order. The grievance raised by the ld. Sr. Dr. in this appeal, is, therefore, devoid of any legally sustainable merits. We reject the addition amount of made by the ld. AO. - Decided in favour of assessee.
Issues:
1. Appeal against order of Commissioner of Income Tax(Appeal) for A.Y. 2017-18. 2. Addition of cash deposit under undisclosed income during demonetization period. 3. Failure of CIT(A) to consider facts and explanation of the assessee. 4. Discrepancy in the time gap between cash withdrawal and deposit. 5. Legal provisions and judgments cited in defense of the assessee. 6. Consideration of genuine cause for non-appearance before CIT(A). Analysis: 1. The appeal was lodged against the order of the Commissioner of Income Tax(Appeal) for the assessment year 2017-18. The dispute arose from the addition of a cash deposit made by the assessee during the demonetization period under undisclosed income, as per the order passed by the Income Tax Officer, Ward-5(4), Amritsar. 2. The assessee had deposited Rs. 16,30,000/- in the bank during demonetization, with a claim that a portion was withdrawn before demonetization for business purposes. However, the Income Tax Officer did not consider this explanation and added the entire amount to the assessee's undisclosed income. 3. The assessee appealed to the Commissioner of Income Tax(Appeal) who upheld the AO's order without due consideration of the facts and explanation provided by the assessee, leading to further appeal before the ITAT. 4. The counsel for the assessee argued that there was a discrepancy in the time gap between cash withdrawal and deposit, which the assessing authority wrongly stated as seven months instead of the actual 70 days. Citing CBDT Instruction No. 3/2017, the counsel emphasized the need for a balanced view considering normal human behavior and specific circumstances. 5. Various judgments were relied upon by the counsel, including ShivcharanDass vs. CIT and a recent ITAT decision, to support the argument that the assessee's explanation was plausible and the addition to undisclosed income was unjustified. 6. The ITAT, after hearing both sides, found that the assessment was completed with factual errors and that the CIT(A) failed to dispose of the appeal on merits. The genuine cause for non-appearance before the CIT(A) was established due to the unfortunate demise of the assessee and her husband. The ITAT concluded that the assessee's explanation regarding the cash deposit was satisfactory, and the addition to undisclosed income was rejected. This detailed analysis covers the issues raised in the legal judgment, the arguments presented by both parties, the relevant legal provisions and judgments cited, and the final decision of the ITAT in favor of the assessee.
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